AAFX TRADING

Daily Market Lookup

  • Asian shares pulled back from a one-and-a-half year peak on Thursday as investors booked profits ahead of holiday trade and awaited further data on the state of the global economy. Investors were also watching proceedings in Washington where the Democrat-led U.S. House of Representatives voted to impeach Republican U.S. President Donald Trump for abuse of power and obstruction of Congress. Market reaction, however, has so far been limited as the Republican-controlled Senate is widely expected not to vote to remove Trump from office. The pound nursed heavy losses due to concerns Britain could still crash out of the European Union without a trade deal in place after a transition period ending in December 2020. Traders also await a Bank of England (BoE) policy meeting later Thursday. No change in policy is expected, but the meeting could pose further downside risks for sterling if more policymakers swing to the dovish camp and vote for an interest rate cut. Overall sentiment was supportive of equities and riskier assets, but less favorable for safe-haven assets like bonds due to expectations that economic growth will start to pick up next year after a tumultuous 2019. Earlier in the session, the S&P 500 hit its fifth consecutive record high, and analysts said market sentiment remained largely upbeat following last week’s announcement of an initial U.S.-China trade agreement Other analysts pointed to recent data releases showing economic improvements in China, the United States and Germany as reasons to be more optimistic. Johnson’s government on Tuesday ruled out an extension to the December 2020 deadline for negotiations on a trade deal with the EU, creating a new Brexit cliff-edge and cutting short sterling’s post-election rally. The focus shifts to the BoE’s policy meeting later Thursday. At its previous meeting, two of the central bank’s nine policymakers voted to cut interest rates. British inflation remained mired at a three-year low in November, data showed on Wednesday, and uncertainty surrounding Brexit remains high, but this is unlikely to shift expectations that monetary policy will remain on hold. The BOJ is widely expected to keep its quantitative easing in place by may offer a gloomier assessment of factory output.
  • Greenback traders awaited a vote to impeach U.S. President Donald Trump. In Britain, the pound remained under pressure on rekindled fears of a chaotic exit from the European Union. It was last at $1.3077 after sliding nearly 2% in as many days. Risk sensitive currencies such as the kiwi and its Australian counterpart started December on a firm footing led by the apparent removal of two main risks dominating global markets: a preliminary U.S.-China trade deal and the election victory of U.K. Prime Minister. However, fears have resurfaced this week. Despite the Sino-U.S. trade agreement, the specter of a U.S.-led tariff war has not disappeared as traders await clarity on the deal. U.S. Trade Representative Robert Lighthizer said on Tuesday that the United States may raise tariffs on European goods as it tries to shrink its chronic trade deficit with the continent, re-igniting worries of the prospects of the export-driven euro. A major headwind for the dollar was a vote in the U.S. House of Representatives on whether to impeach Trump later in the day. The Senate is expected to vote in January. Solid U.S. economic data in recent days have tamed expectations of any easing by the Federal Reserve in the near term, keeping the dollar stronger. Money markets are not pricing in a rate cut anytime soon. Markets will focus on interest rate decisions from the Bank of England and the Bank of Japan later in the day, with both seen unlikely to change policy. The U.S. dollar rose modestly on Tuesday, lifted by a dramatic slide in the pound after British Prime Minister Boris Johnson put a no-deal exit from the European Union back on the table. Britain on Tuesday set a hard deadline of December 2020 to reach a new trade deal with the EU, trying to pressure Brussels to move more quickly to seal an accord. Johnson will use his control of parliament to outlaw any extention of the Brexit transition period beyond 2020. It was his boldest move since winning a large majority in last Thursday's election, and it spooked financial markets. The "phase one" trade deal between Washington and Beijing, announced on Friday after more than 2-1/2 years of volatile negotiations, will reduce U.S. tariffs on Chinese goods in exchange for increased Chinese purchases of some U.S. goods. Fitch ratings agency said the deal eased U.S.-China tensions but that renewed escalation remains a significant risk, with the issue of technology posing an obstacle to full resolution.
  • Oil prices remained in touching distance of three-month peaks on Thursday, extending a robust streak that began a week ago, after data showed U.S. crude inventories had dropped while output cuts by major producers kept supply snug. According to weekly data released by the Energy Information Administration on Wednesday, U.S. crude inventories dropped 1.1 million barrels in the week to Dec. 13, while gasoline and distillates stockpiles rose. While there is a clear uptrend in place on the daily technical price chart for WTI to potentially move towards $61.50 a barrel, there are also near-term risks - touching that price level may encourage traders to sell, McCarthy said. The trend leaves oil prices set to rise for a third consecutive week, surfing momentum from announcements this month about deeper output cuts by major producers as well as the 'Phase One' deal between the United States and China to resolve their long-running trade war. The deal between the world's two largest economies has improved the global economic outlook, lifted the prospect for higher energy demand next year and underpinned oil prices. Just the week before, the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers such as Russia agreed to deepen production cuts by a further 500,000 barrels per day (bpd) from Jan. 1 on top of previous reductions of 1.2 million bpd.

 

 
Intraday RESISTANCE LEVELS
19th December 2019 R1 R2 R3
GOLD-XAU 1,478-1,486 1,494 1,500-1.509
Silver-XAG 17.30 17.60 17.80-18.10
Crude Oil 60.90-61.40 62.00 62.60-63.10
EURO/USD 1.1150-1.1200 1.1230 1.1280-1.1350
GBP/USD 1.3100-1.3200 1.3250 1.3300-1.3350
USD/JPY 110.00 110.70 111.50-111.90

Intraday SUPPORTS LEVELS
19th December 2019 S1 S2 S3
GOLD-XAU 1,468-1,458 1,452 1,442-1,436
Silver-XAG 16.90-16.50 15.90 15.50-14.90
Crude Oil 60.30-59.70 59.00 58.65-57.80
EURO/USD 1.1110 1.1060 1.0980-1.0930
GBP/USD 1.3060-1.3010 1.2930 1.2850-1.2770
USD/JPY 109.50-109.00 108.50 107.80-107.00

Intra-Day Strategy (19th December 2019)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Buy
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Wednesday made its intraday high of US$1479.21/oz and low of US$1470.39/oz. Gold down 0.0413% at US$1475.40/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1483) and breakage above will call for 1492. MACD is below zero line but histograms are increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in neutral territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1468-1442 with risk below 1442, targeting 1478-1489 and 1500-1509. Sell below 1478-1509 keeping stop loss closing above 1510, targeting 1468-1458 and 1452-1442-1438.

 
Intraday Support Levels
S1     1,468-1,458
S2     1,452
S3     1,442-1,436
Intraday Resistance Levels
R1     1,478-1,486
R2     1,494
R3     1,500-1.509

Technical Indicators

Name   Value Action
14DRSI  

53.882

Buy
20-DMA   1467.00 Sell
50-DMA  

1477.63

Sell
100-DMA   1491.07 Sell
200-DMA   1412.03 Buy
STOCH(5,3)   58.621 Buy
MACD(12,26,9)   -0.073 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$17.05/oz and low of US$16.86/oz settled up by 0.0235% at US$16.99/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (17.15), breakage above will lead to 17.61. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in overbought region, indicating buy signal for now. The Stochastic Oscillator is in neutral region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 16.90-14.90 targeting 17.30-17.60 and 17.80-18.50; stop breakage below 14.90. Sell below 17.30-19.30 with stop loss above 19.00; targeting 16.90-16.25-16.00 and 15.70-14.90.

 
Intraday  Support Levels
S1     16.90-16.50
S2     15.90
S3     15.50-14.90

Intraday  Resistance Levels
R1     17.30
R2     17.60
R3     17.80-18.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.313 Buy
20-DMA   16.90 Sell
50-DMA   17.22 Sell
100-DMA   17.42 Sell
200-DMA   16.28 Buy
STOCH(5,3)   78.268 Buy
MACD(12,26,9)   -0.113 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$61.20/bbl, intraday low of US$60.19/bbl and settled up by 0.446% to close at US$60.71/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 200DMA i.e. 56.35 which is a resistance level and breakage above will call for 57.00-58.00. MACD is above zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving positive crossover for confirmation of bullish stance; while the RSI is in neutral region and more downside can be expected to reach the oversold region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 60.30-56.10 with risk daily closing below 56.10 and targeting 60.90-61.45 and 61.90-62.50-63.10. Sell below 60.90-63.10 with stop loss at 63.20; targeting 60.30-59.70-59.00 and 58.50-57.80-57.20.

 
Intraday Support Levels
S1     60.30-59.70
S2     59.00
S3     58.65-57.80

Intraday Resistance Levels
R1     60.90-61.40
R2     62.00
R3     62.60-63.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.638 Sell
20-DMA   58.48 Buy
50-DMA   56.84 Buy
100-DMA   56.07 Buy
200-DMA   57.67 Sell
STOCH(5,3)   80.130 Buy
MACD(12,26,9)   1.0279 Sell

EUR/USD

AAFX TRADING

EUR/USD of Wednesday an intraday low of US$1.1109/EUR, high of US$1.1153/EUR and settled the day down by 0.323% to close at US$1.1112/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1040), which become immediate resistance level, break above will target 1.1100. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.1110-1.0900 with risk below 1.0900, targeting 1.1150-1.1200-1.1230 and 1.1230-1.1280. Sell below 1.1200-1.1420 targeting 1.1110-1.1060-1.1030 and 1.0960-1.0860 with stop-loss at daily closing above 1.1300.

 
Intraday Support Levels
S1     1.1110
S2     1.1060
S3     1.0980-1.0930

Intraday  Resistance Levels
R1     1.1150-1.1200
R2     1.1230
R3     1.1280-1.1350

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.357 Buy
20-DMA   1.1074 Sell
50-DMA   1.1077 Sell
100-DMA   1.1064 Sell
200-DMA   1.1150 Sell
STOCH(5,3)   53.958 Sell
MACD(12,26,9)   -0.005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3059/GBP, high of US$1.3133/GBP and settled the day down by 0.393% to close at US$1.3077/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2769) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in neutral territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.3100-1.3350 with targets at 1.3060-1.3010-1.2930 and 1.2850-1.2770 stop-loss should be below 1.3705. Buy above 1.3060-1.3200 with targets 1.3400-1.3510-1.3590 and 1.3630-1.3705 with stop loss closing below 1.3100.

 
Intraday Support Levels
S1     1.3060-1.3010
S2     1.2930
S3     1.2850-1.2770

Intraday Resistance Levels
R1     1.3100-1.3200
R2     1.3250
R3     1.3300-1.3350

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

54.940

Buy
20-DMA   1.3056 Buy
50-DMA   1.2931 Buy
100-DMA   1.2591 Buy
200-DMA   1.2696 Buy
STOCH(5,3)   29.191 Sell
MACD(12,26,9)   0.0012 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY109.43/USD and made an intraday high of JPY109.62/USD and settled the day up by 0.0575% at JPY109.53/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (107.70), which is initial support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is in oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 109.50-111.70 with risk above 111.90 targeting 109.00-108.50-107.80 and 107.00-106.50. Long positions above 109.10-107.00 with targets of 109.50-110.00 and 110.70-111.30 with stop below 107.00.

 
Intraday Support Levels
S1     109.50-109.00
S2     108.50
S3     107.80-107.00

INTRADAY RESISTANCE LEVELS
R1     110.00
R2     110.70
R3     111.50-111.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.367 Buy
20-DMA   109.07 Sell
50-DMA   108.84 Buy
100-DMA   107.87 Buy
200-DMA   108.74 Sell
STOCH(9,6)   84.253 Buy
MACD(12,26,9)   0.206 Buy

AAFX TRADING
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